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ANALYSIS

VITALITYRELATIVE COSTS LIVING BUSINESS RELATIVE OF LIFE

Best=1, Worst=378Best=1, Worst=403

STRENGTHS & WEAKNESSES

U.S.=100%

SHORT TERM

FORECAST RISKS

LONG TERM

RISK EXPOSURE 2019-2024

BUSINESS CYCLE STATUS

MOODY’S RATING

ECONOMIC DRIVERS

Highest=1 Lowest=403

EMPLOYMENT GROWTH RANK

Best=1, Worst=410

2018-2020 2018-2023 QUALITY

MOODY’S ANALYTICS / Précis® U.S. Metro / December 2019

RETIREE

HAVEN

TOURIST

DESTINATION

MEDICAL

CENTER

2013 2014 2015 2016 2017 2018 INDICATORS 2019 2020 2021 2022 2023 2024 3.4 3.4 3.4 3.3 3.4 3.4 Gross metro product (C12$ bil) 3.5 3.6 3.7 3.8 3.9 4.0 -3.1 0.4 -0.7 -3.0 2.3 0.5 % change 2.4 2.5 2.5 3.7 2.9 2.7 32.2 32.0 32.8 33.3 33.2 33.4 Total employment (ths) 34.0 34.4 34.4 34.7 35.0 35.2 -3.1 -0.4 2.4 1.4 -0.1 0.6 % change 1.7 1.3 -0.0 0.8 0.9 0.6 9.7 8.5 7.6 6.8 5.9 5.2 Unemployment rate (%) 4.9 5.2 5.8 6.1 6.1 6.2 2.1 3.7 5.1 2.7 5.5 5.3 Personal income growth (%) 5.9 6.7 6.5 8.0 7.2 6.6 38.8 39.1 39.3 41.5 43.5 45.6 Median household income ($ ths) 48.1 50.3 51.8 53.8 55.9 57.9 138.8 138.8 140.3 142.9 145.5 147.9 Population (ths) 150.1 152.4 154.4 156.5 158.6 160.7 -0.2 0.0 1.1 1.8 1.9 1.7 % change 1.5 1.5 1.4 1.3 1.3 1.3 1.1 1.4 3.0 4.0 4.1 3.9 Net migration (ths) 3.7 3.8 3.6 3.7 3.7 3.8 201 233 354 371 433 884 Single-family permits (#) 720 794 1,061 1,408 1,476 1,439 0 0 24 145 113 0 Multifamily permits (#) 59 35 29 26 25 24 141.9 144.4 159.6 173.3 191.7 213.7 FHFA house price (1995Q1=100) 225.1 221.0 220.4 219.8 221.7 228.6

Recent Performance. Homosassa Springs is bringing up the rear in Florida. Job growth has slowed, dipping below the national average. HOM is the only area in Florida where payroll employ- ment is significantly below its prerecession peak. Though some of the shortfall owes to the severity of the last downturn, the metro area has consistently underperformed its Florida peers over the last de- cade. The labor market is also softer than previously believed—the Quarterly Census of Employment and Wages indicates that survey-based estimates overcounted employment in 2019. Private services are underperforming, including leisure/hospitality, but education/healthcare is expanding with vigor. At 4.5%, the jobless rate is nearing its cycle low, and labor market tightness has sent hourly earnings sharply higher, with average pay closer to the Flor- ida and U.S. averages than at any time since 2013.

Retirees. A large and expanding retiree popu- lation will help right the ship and secure HOM’s spot in the top quintile of areas in job growth through 2023. Residents age 65 or older account for a well above-average one-quarter of HOM’s population, as retirees are drawn to the warm cli- mate, low taxes, and high housing affordability relative to other senior havens in the state.

Although seniors do not purchase as many big-ticket items as other age cohorts, their pres- ence will help healthcare outperform. Rising de- mand for facilities that care for the elderly led to a surge in employment at residential care facili- ties in 2019. Healthcare will add more jobs than any other industry in 2020, led by expansion at Citrus Memorial Hospital and Seven Rivers Com- munity Hospital. Even though HOM’s senior co- hort is growing more slowly than that of the U.S., a turnaround in the prime working-age popula- tion will support demand for healthcare and la- bor supply in the industry. Healthcare employ- ment will rise close to 2% in 2020, outpacing the national rate.

Residential real estate. A near twofold increase in residential building by the end of 2022 will keep HOM’s construction crews busy. Surging baby boomer in-migration and tight supplies will extend the boom in housing that will reverberate through the rest of the economy. Retirees will seek out HOM thanks to its lower cost of living than in nearby Tampa. Greater household mobility will also enable more snowbirds to migrate south. Lower mortgage rates have bolstered housing affordability, leading to an uptick in sales and price growth. The latter will encourage contractors to build and sell more units. Construction and real estate jobs will increase, and by 2021 a well above-average 15% of workers will be employed in housing-related industries.

Spending. Tourist traffic, population growth and pay increases will generate demand at stores, res- taurants, and other service providers in 2020. Per- sistent employment and wage gains will spur more vacation spending in destinations such as HOM. The same factors that will ensure a steady influx of baby boomers will encourage many households to choose HOM as their destination instead of neighboring, landlocked The Villages and Ocala. Activities ranging from the Ellie Schiller Wildlife State Park to count- less boat and diving tours will attract visitors too. More tourism dollars will benefit top employer Black Diamond Ranch, and higher minimum wages should benefit many of HOM’s tourism workers, though the highest costs borne by employers are also reflected in labor-saving adjustments that will translate into fewer net new jobs in consumer services.

Homosassa Springs will regain its stride in 2020, led by healthcare and construction. Con- sumer services will also lend support, albeit less so than in recent years. Robust population trends, low living costs, and abundant ameni- ties and attractions will ensure that HOM is an above-average long-run performer.

Olga Kuranova December 2019

STRENGTHS » Steady in-migration of retirees supports

healthcare and consumer services. » Favorable climate and coastal location with

proximity to prominent Florida hubs such as Orlando and Tampa.

» Single-family housing is fairly valued.

WEAKNESSES » Few drivers beyond tourism, healthcare. » Low workforce skill level and high employment

volatility deter investment.

UPSIDE » In-migration picks up faster than expected;

housing and consumer industries benefit. » Local government lends greater support. » Bigger boost from tourism.

DOWNSIDE » Volatility in equity markets causes the retiree

population to reduce spending, and the job market suffers.

» Slack in job market forestalls pay gains, and wage income disappoints.

X X

COUNTY AS OF MAY 04, 2018Aa3

19 1st quintile

24784% Rank: 275

102%96%133 2nd quintile

119 2nd quintile

At Risk

Recovery

Mid Expansion

Late Expansion

In Recession

HOMOSASSA SPRINGS FL Data Buffet® MSA code: IUSA_MHOM

MOODY’S ANALYTICS / Précis® U.S. Metro / December 2019

3-MO MA Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Employment, change, ths 0.1 0.1 0.0 -0.0 -0.0 0.0 Unemployment rate, % 4.9 4.9 4.9 4.9 4.8 4.7 Labor force participation rate, % 37.3 37.3 37.2 37.2 37.2 ND Average weekly hours, # 34.1 34.3 34.5 34.7 34.9 35.8 Industrial production, 2012=100 108.6 108.6 108.8 109.0 109.1 109.0 Residential permits, single-family, # 556 719 867 927 950 962 Residential permits, multifamily, # 79 43 2 5 6 5

Dec/Dec 2013 2014 2015 2016 2017 2018 Employment, change, ths -1.1 0.3 1.4 -0.3 0.1 0.3

PRÉCIS® U.S. METRO • Homosassa Springs FL

HOM FL U.S. 09 10 11 12 13 14 15 16 17 18 19

85 90 95

100 105 110 115 120 125 130

14 15 16 17 18 19 -5

HOM FL U.S. 14 15 16 17 18 19

HOM FL U.S. 09 10 11 12 13 14 15 16 17 18 19F 20F 21F 22F 23F

90 95

100 105 110 115 120 125 130

l ▼▲ W

l ▼▲ X

l ▼▲ l ▼▲

HOM FL U.S. 98 01 04 07 10 13 16 19

80 100 120 140 160 180 200 220 240 260 280

HOM FL U.S. 0.0 0.5 1.0 1.5 2.0 2.5

HOM FL U.S. 0 5 10 15 20 25

HOM FL U.S. 96 98 00 02 04 06 08 10 12 14 16 18

60 80

100 120 140 160 180 200 220 240

Overvalued Undervalued 98 01 04 07 10 13 16 19

-20

-10

% CHANGE YR AGO, 3-MO MA Nov 18 May 19 Nov 19 Total 1.8 2.2 1.3 Mining 3.4 3.5 1.8 Construction 7.1 4.0 3.6 Manufacturing 2.6 2.4 1.7 Trade 1.1 1.6 0.8 Trans/Utilities 1.1 1.6 0.8 Information 1.1 1.6 0.8 Financial Activities 1.1 1.6 0.8 Prof & Business Svcs. 1.1 1.6 0.8 Edu & Health Svcs. 1.1 1.6 0.8 Leisure & Hospitality 1.1 1.6 0.8 Other Services 1.1 1.6 0.8 Government 2.7 4.6 2.3

FORECAST VS. 6 MO PRIOR

2-Yr 5-Yr

3-DIGIT NAICS LEVEL, 6-MO MA

Sources: BLS, Moody’s Analytics

ECONOMIC HEALTH CHECK BUSINESS CYCLE INDEX

RELATIVE EMPLOYMENT PERFORMANCE

CURRENT EMPLOYMENT TRENDS

Source: Moody’s Analytics

Sources: BLS, Moody’s AnalyticsSources: BLS, Moody’s Analytics

Sources: BLS, Moody’s Analytics

% CHANGE YR AGO

Government Goods producing Private services

HOUSE PRICE

Sources: FHFA, Moody’s Analytics

Better than prior 3-mo MA Unchanged from prior 3-mo MA Worse than prior 3-mo MA Sources: BLS, Census Bureau, Moody’s Analytics

VACANCY RATES HOMEOWNER, % HOUSES FOR SALE

DIFFUSION INDEX

HOUSE PRICE TRENDS

Sources: NAR, Moody’s Analytics

GREATER THAN 100=MORE AFFORDABLE

HOUSING AFFORDABILITY

Sources: FHFA, Moody’s Analytics

JAN 2009=100

JAN 2009=100 1998Q1=100, NSA

RENTAL, % INVENTORY FOR RENT

Sources: Census Bureau, ACS, Moody’s Analytics, 2018

LO W

H IG

Ths % of total

MOODY’S ANALYTICS / Précis® U.S. Metro / December 2019

PRÉCIS® U.S. METRO • Homosassa Springs FL

Source: Moody’s Analytics, 2018

64%

100

146

100

HOM U.S.

0.53

0.00

0.20

0.40

0.60

0.80

1.00

Location Employees NAICS Industry Quotient (ths)

6211 Offices of physicians 2.1 1.2 2211 Electric power generation, trans. & distrib. 9.7 0.9 GVF Federal Government 0.3 0.2 5415 Computer systems design & related srvcs. 0.2 0.1 GVL Local Government 1.1 3.6 4411 Automobile dealers 2.7 0.8 2382 Building equipment contractors 1.7 0.8 5613 Employment services 0.6 0.5 7225 Restaurants and other eating places 1.3 3.2 6221 General medical and surgical hospitals 1.9 2.0 4451 Grocery stores 2.2 1.4 4529 Other general merchandise stores 2.8 1.2

Source: Moody’s Analytics, 2018

Federal 224 State 522 Local 3,609

2018

HOM 4.9 14.6

U.S. 14,296.2 9.6

HOM 0.8 2.3

U.S. 7,261.0 4.9

Citrus Memorial Hospital 1,400 Progress Energy 1,000 Walmart Supercenter 750 Seven Rivers Regional Medical Center 525 Publix Super Markets Inc. 500-1,250 Duke Energy 350 Winn-Dixie Stores Inc. 300-750 Black Diamond Ranch 250 Citrus Hills Investment Prop 250 Home Depot 100-249 Kmart 100-249 Lowe’s 100-249 Applebee’s 100-249 Outback Steakhouse 100-249 Olive Garden 100-249 Life Care Center of Citrus County 100-249 Loving Care In Home Services 100-249 Crystal Chevrolet 100-249 Diamond Ridge Health & Rehab 100-249 Consulate Health Care 100-249

Sources: Citrus County Clerk and Comptroller, 2017, Florida Department of Economic Opportunity, 2017

Product $ mil Food and kindred products ND Chemicals ND Primary metal manufacturing ND Fabricated metal products 0.8 Machinery, except electrical 2.8 Computer and electronic products 1.5 Transportation equipment 0.6 Miscellaneous manufacturing ND Other products ND Total 9.3

Destination $ mil Africa 0.2 Asia 1.6 European Union 0.7 Canada & Mexico 1.2 South America 0.3 Rest of world 5.2 Total 9.3

% of GDP 0.2 Rank among all metro areas 370

Sources: BEA, International Trade Administration, Moody’s Analytics, 2018

68,993 73,874 92,001

HOM FL U.S.

0 20 40 60 80 100 120

COMPARATIVE EMPLOYMENT AND INCOME % OF TOTAL EMPLOYMENT AVERAGE ANNUAL EARNINGS Sector HOM FL U.S. HOM FL U.S. Mining 0.2 0.0 0.5 nd $19,884 $103,785 Construction 8.9 6.2 4.9 $59,642 $56,457 $68,455 Manufacturing 1.5 4.2 8.5 $39,961 $71,177 $83,365 Durable 78.1 68.0 62.6 nd $75,720 $86,331 Nondurable 21.9 32.0 37.4 nd $61,961 $78,483 Transportation/Utilities 4.3 3.5 4.0 $79,470 $46,154 $60,890 Wholesale Trade 1.0 3.9 3.9 $50,530 $84,396 $88,316 Retail Trade 17.2 12.9 10.6 $32,468 $34,248 $35,245 Information 1.1 1.6 1.9 $45,575 $89,662 $119,417 Financial Activities 3.5 6.6 5.7 $20,097 $41,009 $59,540 Prof. and Bus. Services 9.0 15.6 14.1 $38,046 $54,872 $71,767 Educ. and Health Services 23.4 14.9 15.9 $49,474 $54,188 $56,400 Leisure and Hosp. Services 14.0 14.0 11.0 $19,891 $29,092 $29,108 Other Services 2.9 4.0 3.9 $32,907 $33,781 $38,639 Government 13.0 12.7 15.1 $54,732 $72,615 $78,273

Sources: Percent of total employment — BLS, Moody’s Analytics, 2018, Average annual earnings — BEA, Moody’s Analytics, 2017

Series Not Found FL

1/3 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8

EMPLOYMENT AND INDUSTRY ENTREPRENEURSHIP

Due to U.S. fl uctuations Relative to U.S.

TOP EMPLOYERS

PUBLIC

INDUSTRIAL DIVERSITY

EMPLOYMENT VOLATILITY

Due to U.S.

Most Diverse (U.S.)

Least Diverse

Not due to U.S. M

LEADING INDUSTRIES BY WAGE TIER HIGH-TECH

EMPLOYMENT

HOUSING-RELATED EMPLOYMENT

BUSINESS COSTS

Source: Moody’s Analytics

U.S.=100

EXPORTS

PRODUCTIVITY

Total

Unit labor

Energy

State and local taxes

Offi ce rent

REAL OUTPUT PER WORKER, $

EMPLOYMENT IN NEW COMPANIES, % OF TOTAL

Sources: BEA, Moody’s Analytics, 2017

2012 2017

Sources: Census Bureau, Moody’s Analytics, avg 2012-2016

NOT AVAILABLE

NET MIGRATION, #

MOODY’S ANALYTICS / Précis® U.S. Metro / December 2019

HOM U.S.

Sources: Census Bureau, ACS, Moody’s Analytics, 2018

HOM FL U.S.

08 09 10 11 12 13 14 15 16 17 18 25

INTO HOMOSASSA SPRINGS FL Number of

Migrants Tampa FL 1,770 Ocala FL 839 Orlando FL 543 The Villages FL 224 Fort Lauderdale FL 198 Lakeland FL 133 West Palm Beach FL 120 Miami FL 107 North Port FL 104 Cape Coral FL 91 Total in-migration 10,094

FROM HOMOSASSA SPRINGS FL Tampa FL 1,059 Ocala FL 773 Orlando FL 349 The Villages FL 172 Jacksonville FL 92 Gainesville FL 83 Palm Bay FL 78 Lakeland FL 70 West Palm Beach FL 65 Deltona FL 63 Total out-migration 6,744

Net migration 3,350

Index 2018 Rank* Gini coefficient 0.49 57 Palma ratio 3.1 177 Poverty rate 15.2% 138

*Most unequal=1; Most equal=403

19 11

0 2 4 6 8 10 12 14 16 18

Net Migration, HOM

15 16 17 18 0

1,000

2,000

3,000

4,000

5,000

0 10 20 30 40

0 5 10 15 20 25 30

HOM U.S.

0 5 10 15 20 25 30 35

2015 2016 2017 2018 Domestic 2,951 3,932 4,011 3,889 Foreign 39 54 58 -232 Total 2,989 3,987 4,070 3,657

Sources: IRS (top), 2018, Census Bureau, Moody’s Analytics

HOM FL U.S.

88.0%

Top Five Outside Sources of Workers Homosassa Springs FL Share Tampa FL 4.5 Ocala FL 4.5 The Villages FL 0.7 Orlando FL 0.2 Florence SC 0.2

76.1%

Top Five Outside Sources of Jobs Homosassa Springs FL Share Ocala FL 9.1 Tampa FL 6.7 The Villages FL 2.1 Orlando FL 2.0 Gainesville FL 0.5

Sources: Census Bureau, Moody’s Analytics, avg 2009-2013

RESIDENTS WHO WORK IN HOM WORKERS WHO LIVE IN HOM

PRÉCIS® U.S. METRO • Homosassa Springs FL

HOM

COMMUTER FLOWS

ECONOMIC DISENFRANCHISEMENT

Undereducated Balanced Overeducated

MIGRATION FLOWS

GENERATIONAL BREAKDOWN

SKILLS MISMATCH

EDUCATIONAL ATTAINMENT

% OF ADULTS 25 AND OLDER

< High school High school Some college College Graduate school

100

POPULATION BY AGE, %

U.S.

≥75 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14

5-9 0-4

PER CAPITA INCOME

Sources: BEA, Moody’s Analytics

$ THS

POPULATION BY GENERATION, %

% OF TOTAL

Less than HS

High School

Some College

Associate’s

Bachelor’s

Graduate

Occupations Population

HOUSEHOLDS BY INCOME, %

Gen Z

Millennial

Gen X

Baby Boom

Silent & Greatest

0-19,999 20,000-39,999 40,000-59,999 60,000-74,999 75,000-99,999

100,000-124,999 125,000-149,999 150,000-199,999

200,000+

U.S.

NET MIGRATION, #

20 13

2018 HOM $38,707 FL $50,070 U.S. $54,446

Sources: Census Bureau, ACS, Moody’s Analytics, 2018

Sources: Census Bureau, Moody’s Analytics, 2018 Sources: Census Bureau, ACS, Moody’s Analytics, 2018 Sources: Census Bureau, Moody’s Analytics, 2018

MOODY’S ANALYTICS / Précis® U.S. Metro / December 2019

GEOGRAPHIC PROFILE

Sources: ACS, Moody’s Analytics

POPULATION DENSITY

MEDIAN HOUSEHOLD INCOME

MEDIAN COMMUTE TIME

POPULATION & HOUSING CHARACTERISTICS

Units Value Rank*

Total area sq mi 773.2 340

Total water area sq mi 191.3 98

Total land area sq mi 581.7 359

Land area - developable sq mi 556.6 277

Land area - undevelopable sq mi 25.3 328

Population density pop. to developable land 253.2 296

Total population ths 147.9 304

U.S. citizen at birth % of population 92.6 181

Naturalized U.S. citizen % of population 3.3 166

Not a U.S. citizen % of population 2.1 294

Median age 57.2 3

Total housing units ths 80.0 254

Owner occupied % of total 64.5 43

Renter occupied % of total 13.3 394

Vacant % of total 22.1 25

1-unit; detached % of total 68.7 147

1-unit; attached % of total 1.7 350

Multifamily % of total 7.2 402

Median year built 1987

* Areas & pop. density, out of 410 metro areas/divisions, including metros in Puerto Rico; all others, out of 403 metros.

Sources: Census Bureau, Moody’s Analytics, 2018 except land area 2010

PRÉCIS® U.S. METRO • Homosassa Springs FL

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Additional terms for Japan only: Moody’s Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody’s Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.